Insurance agent Cindy Holtzman was a little surprised by the advice of Bright HealthCare, one of the insurers that offers Affordable Care Act coverage in her area.
The company’s February memo says its health plan enrollments have seen “extraordinary growth” – surpassing “one million members” the previous year – and linked that success to the good relationship it has with brokers. . But, the note continues, the insurer wanted to “suspend growth during this special enrollment season” and would therefore stop paying commissions to brokers who enroll new people for coverage beginning April 1.
“Why sell something I’m not paid for? Holtzman, based in Georgia, recalled thinking.
Related: eHealth provides an overview of commissions per enrollee
Bright Health isn’t the only company cutting commissions. Several other insurers, including Oscar, Molina Healthcare and some Blue Cross Blue Shield plans, have recently taken similar steps — just as the Biden administration is rolling out a new ACA special registration option aimed at enrolling low-income Americans in ACA coverage outside of the usual annual opening period. The new enrollment program became available in mid-March for coverage beginning in early April.
The insurance industry trade group, however, opposed the plan, saying people who enroll outside the year-end enrollment window tend to get sicker, drive up the price of insurance and cost insurers more.
“We have strong concerns that this will create instability in the individual market and result in increased premiums for all enrollees,” AHIP wrote in a July statement. comment letter to federal agencies.
Consumers could, insurers warn, wait until they get sick to enroll or switch to a plan with more generous benefits. The Centers for Medicare & Medicaid Services believe the special enrollment program for low-income people could increase premiums 0.5% to 2% per year due to sicker enrollments.
Special registration periods have always been allowed under the ACA when triggered by certain life events. All others register during the annual open registration, usually from November to January. This restriction is designed to reduce the incentive for people to wait until they are sick to buy insurance, which would likely increase the cost of premiums for everyone.
Last year, the Biden administration added a special six-month covid-related listing, resulting in a record 2.8 million registrations.
Still, “there is limited data on whether people are getting sicker” during the special enrollment periods that have occurred since the ACA began, said Katie Keith, a researcher at the Center on Health Insurance. Georgetown University Reforms, adding that some of the verification industry-backed rules around previous special enrollment exceptions are onerous enough to discourage healthy people more than sick people. Brokers note that low-income customers turn to brokers when considering insurance coverage.
“These are the people who often need help the most,” said Marcy Buckner, senior vice president of government affairs at the National Association of Health Underwriters, an industry trade and lobbying group. “Agents and brokers want to help consumers, but they also need to keep their doors open. If they don’t earn commissions, they may not be able to help these consumers. »
The decision by some insurers to cut commissions effective April 1 has caught the attention of not only brokers, but also federal regulators.
“We are concerned about the impact on consumers, particularly those whose circumstances lead them to register mid-year, and are actively investigating this matter,” said Ellen Montz, director of the Center for Consumer Information and Insurance Oversight at CMS. statement.
The Biden administration program allows people who earn less than 150% of the federal poverty level — about $19,320 for a single person or $32,940 for a family of three — to enroll at any point in time. year. Other special sign-up offers, such as those for people who are losing business insurance, getting married or divorced, or wanting to add a baby to their plans, are usually time-limited. Of those currently uninsured, one estimated at 1.3 million may be eligible for the new low-income enrollment option.
Many more may need help registering soon for another reason, policy experts said. Some estimate that millions of people could lose Medicaid coverage once the official pandemic emergency is over, as states will no longer be bound by an agreement they have with the federal government not to abandon enrollees during the pandemic.
Although many of these health care consumers can self-register in federal or state markets, or seek help from assistants funded by federal grants, experts say some may turn to private brokers, who may not want to take on new clients if they are not. are going to be paid for their time.
“If insurers don’t pay commissions for the special enrollment period, it will decrease enrollment,” said Sarah Lueck, vice president for health policy at the Center on Budget and Policy Priorities, a left-leaning think tank. in Washington, DC.
Agents and brokers also argue that changing commissions mid-year could violate federal or state rules prohibiting discrimination.
They point to CMS Tips released in 2016 as some insurers changed commission structures, warning the industry against practices that had the effect of “discouraging people with significant health needs from enrolling in health insurance coverage.”
Neither Oscar nor Molina would comment on this story. In a written statement, Bright HealthCare said the industry tries “to ensure continued access to care at affordable prices” and “is working closely with its brokers to implement the [special enrollment period] commissions change as part of the solution.
The Biden administration’s new policy for special enrollment of low-income people automatically applies to the 30 states use the Federal Health Exchange; others who run their own markets have a choice whether or not to offer it. Excluded are those who are eligible for Medicaid or who have employment-based coverage that meets the ACA’s criteria as affordable.
Although the new special registration period is considered permanent, eligibility is tied to increased grants made available through the American Rescue Plan Act to help people buy coverage, which expires at the end of 2022 unless Congress extends them.
Insurers have recently expressed concerns about more expensive customers signing up during special times, some blame the higher costs towards the end of last year on new registrations.
Some of these cut commissions, however, like Molinaposted profits again last year.
But not at all. Oscar, for example, saw a 49% increase in membership in 2021, but a net loss of $571 million. Bright Health GroupBright HealthCare’s parent company, also saw membership growth last year, but with a net loss of over $1 billion.
The brokers say federal statistics recently shared with them revealed that nearly half of all listings during special listing periods were aided by brokers.
Insurers shouldn’t credit brokers on the one hand for tremendous growth and then cut their pay, said Ronnell Nolan, president and CEO of Health Agents for America, a broker advocacy and trade group.
“They can always point out how they’re losing money. I always say, ‘Let’s check senior management revenue’ and guess what, it’s not zero,” Nolan said. “If they’re not doing a good job with their finances, that’s not my job. We do our job.
Commissions are paid by insurers, so consumers who use a broker pay no more than those who don’t. Yet commissions are baked into overall bonuses, which can drive up prices across the board, and some policy experts wonder if commissions lead agents to push some plans over others.
Unlike brokers, government-funded browsers do not earn commission, and they cannot offer a specific plan to customers.
“We help them filter the plans, which can be overwhelming,” said Jodi Ray, director of the nonprofit Florida Covering Kids & Families, one of more than 60 Navigator programs operating in 30 states.
Navigation programs got a boost this year, when the Biden administration dramatically increased funding above levels paid under the Trump administration.
So Ray isn’t worried about having enough staff to help people with the new low-income enrollment or the expected surge of former Medicaid patients who may lose their Medicaid eligibility once the pandemic emergency is over.
Instead, she worries “whether the state is willing to let people know where they can get this free help.”
KHN (Kaiser Health News) is a national newsroom that produces in-depth journalism on health issues. Along with policy analysis and polling, KHN is one of the three main operating programs of KFF (Kaiser Family Foundation). KFF is an endowed non-profit organization providing information on health issues to the nation.